Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need help with a-f Laiho Industries's 2014 and 2015 balance sheets (in thousands of dollars) are shown. Sales for 2015 were $455, 150,000, and

image text in transcribed
I need help with a-f
Laiho Industries's 2014 and 2015 balance sheets (in thousands of dollars) are shown. Sales for 2015 were $455, 150,000, and EBITDA was 15% of sales. Furthermore, depreciation and amortization were 11% of net fixed assets, interest was $8, 575,000, the corporate tax rate was 40%, and Laiho pays 40% of its net income as dividends. Given this information, construct the firm's 2015 income statement. Construct the statement of stockholders' equity for the year ending December 31, 2015, and the 2015 statement of cash flows. Calculate 2014 and 2015 net operating working capital (NOWC) and 2015 free cash flow (FCF). If Laiho increased its dividend payout ratio, what effect would this have on corporate taxes paid? What effect would this have on taxes paid by the company's shareholders? Assume that the firm's after-tax cost of capital is 10.5%. What is the firm's 2015 EVA? Assume that the firm's stock price is $22 per share and that at year-end 2015 the firm has million shares outstanding. What is the firm's MVA at year-end 2015

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing a business risk appraoch

Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston

6th Edition

9780324645095, 324645090, 978-0324375589

More Books

Students also viewed these Accounting questions

Question

Why was the phi phenomenon so important to Wertheimer?

Answered: 1 week ago